The fallacy of western economics II; China Breaks the mould

The economic rise of China is perhaps the best example that challenges the basic foundations of the “science” of economics and demonstrates the invalidity of many of its theories.

In the previous article (http://thesaker.is/the-fallacy-of-western-economics-slavery-in-disguise/), I expressed my views about how the West used the principles of economics as a means to impose on the rest of the world a new era of slavery. In this sequel article (which was not planned at all), I will be using the example of China to express my views about how China managed to operate and succeed outside those alleged laws and how those same Western “laws” are turning back to bite the very hand that not only fed them, but also created them.

Manufacturing is not new to China, neither is industrial innovation, and despite the many barriers that stood in the way of trading with China prior to America’s formal recognition of the Maoist Government in 1979, following Nixon’s historical visit in 1972, the Peoples Republic of China was already exporting to the international market a hoard of products. They were cheap, extremely cheap, but generally of very poor quality, especially if advanced technological skills were needed in their manufacture.

But when the retail price of an English-made wrench was $20 compared to $2 for a Chinese-made one, many Western consumers began to look the other way, knowing beforehand that the quality of the Chinese product was not going to be anything comparable to that of what is in the category of the “best of British”.

The Chinese insatiable desire to industrialize was flagged by some shrewd Western industrialists. They were totally aware that manufacturing was part-and-parcel of the Chinese psyche, and they decided to capitalize on the phenomenon.

In reality therefore, the first steps for China to ramp up its technological and industrial prowess was fueled by Western investors; and this is not a secret. The rise of China as a successful economic giant has been fed and orchestrated by Western corporate greed seeking cheap labour.

Those corporations brought home “good news”; they achieved profit, generated growth, made happy shareholders and were delighted with their performance on Wall St.

In doing so, those corporations were applying the “rules” and “laws” of economics, and they “succeeded”. What they did not foresee was that this success was going to lead to national disasters at home. Their “laws” of economics do not warn about such sequential developments, and even if they did, the CEO’s would still be blinded by their personal performances, corporate profit and not worrying about domestic unemployment and degradation of their own local and national industrial base. As a matter of fact, those CEO’s cannot still be in denial now after they have seen the demise of Western industries, but they continue to be indifferent, and they will only relocate their manufacturing base back home if and when they are given tax incentives.

And China is not like any other nation. Its high population gives it a demographic clout that no other nation possesses, and there are no “laws” and “rules” of economics that warn about this, are there?

And even though India’s population is not far behind, the psyches of the two nations, China and India, are quite different when it comes to industrialization. This statement is not to undermine India at all, because India had other avenues and challenges to contend with, and while China was focusing on developing industry, India’s educated English-speaking youth were keen on developing IT skills and became world leaders; both in quality and quantity. As a matter of fact, many key IT positions in the USA itself cannot now be filled by qualified Americans when the jobs are advertised, and employers end up recruiting Indian professionals to fill those positions.

India certainly developed a diverse range of industrial sectors throughout the nation, but let us not digress. But, when it comes to actual manufacturing and the way a nation can mass mobilize for this, nothing equals China. Many nations possess enormous potential labour power, perhaps not as much as China and India, but if we look at Egypt for example, Egypt has a very poor economy and is in a desperate situation to create employment and higher standards of living. And even though many Egyptians are highly qualified artisans, a Pharaonic heritage perhaps, the mass-production factory concept is not something that the current Egyptian culture and psyche are familiar with, not to that kind of scale.

So when China decided to capitalize on the knowledge and experience it learned from Western investors, it did not only have the human resources, but also the preparedness and determination to develop its own technology and industries at all levels; human, economic and practical. From personal experience, I recollect from a visit to Shenzhen back in 2002, how my tour guide was bragging about the rate of new factories emerging in his city; something that Westerners would be cringing about.

Add to this China’s military might. But even when Chairman Mao sent a million troops into Korea seven decades ago, armed only with rifles and a handful of rice, the whole UN so-called “Police Action” had to take notice.

So who would want to mess with a more advanced and military capable China over half a century later?

But as Chinese-made products became of better quality, and continued to be much cheaper than Western-made products, Western manufacturers were no longer able to compete.

In effect therefore, China was not only unstoppable by the West because of its demographic might, military might, cheap products of ever improving quality, but also because the West grew extremely dependent on and addicted to cheap Chinese imports.

During that same visit to China, I inadvertently met a British businessman in his fifties, someone who had lived in Hong Kong for virtually all of his life and continued to live there after the 1997 handover to China. He had a prediction; he said that China has a master plan to become the ONLY industrial nation of the world; it will compete with all other industrial nations on price, bring them to bankruptcy, factory by factory, nation by nation, and then when it becomes the sole provider of virtually all global consumable goods, it will dictate prices and bring the world down to its knees.

I did not agree with the second component of his vision back then and I don’t now, and the reason is simple. If China endeavours to be the world’s prime exporter of consumables, it will need to make sure that its clients remain affluent enough to be able to buy its products.

But the first component of his prediction is coming home. China is now already the biggest exporter of almost all manufactured commodities, and many competitors have already closed down.

It is ironic therefore, that America is imposing tariffs and sanctions on China when in fact all that China has to do is to ban exports to America for a month and America will run out of consumer goods; all the way from T-shirts to iPhones. China even manufactures some high-tech hardware used by the military, again because lazy and profit-driven giants like Lockheed have subcontracted Chinese manufacturers to produce them in order to increase profitability.

Where in the “rules” of economics do we find any rhetoric that alludes to such contingencies that are not merely profit-driven and based?

And whilst the West normally keeps its own currency high and the currencies of poorer nations low in a deliberate attempt to profiteer from cheap imports, in the case of China, this approach is backfiring. To begin with, there is no rational or economic “law” that could explain why China, the world’s second largest economy, a nation with no debt, with huge savings and exports, would have a Renminbi (Yuan) worth quarter of a USD or so. I am not necessarily talking about parity with the USD, but according to the “rules” of economics, the Yuan should be much higher. However, the low Yuan is in reality helping Chinese exporters and also flooding Western markets with cheap Chinese exports. In the case of China therefore, currency fixing and manipulation is not at all working to the benefit of the West. Had it been benefiting the West in general, America would not have to impose tariffs on Chinese goods.

If anything, the rise of China is the outcome of breaking the economic mould and not a result of being subject to its “rules” and “laws”. And if anything also, by following the “rules” of economics of growth and profitability, Western corporations have led to the demise of their own Western economies. Did their knowledge and mastery of the so-called “macroeconomics” help them? Not in the least.

So back to the subject of economics as a whole; the rise of China illustrates that even if the “rules” and “laws” of economics, immoral as they may be, are to be endorsed and accepted as the pragmatic indispensable evil, they seem to only work if nations are in total control of all aspects of the economy; including the manufacturing base, and when this fundamental base is lost, the whole economy turns into jelly.

Once again, economics is not a science. It is nothing short of a set of speculations that are designed to capitalize on the huge gap between the “haves and the have-nots” in order to keep rich rich and the poor poor. Camouflaged by glamourous descriptions, the monstrous seed of “personal enterprise” enshrined in the core of economics has sprouted, but it can no longer hide its ugly face because its fruit is ripe for the picking, it is the fruit of avarice.

The Essential Saker II: Civilizational Choices and Geopolitics / The Russian challenge to the hegemony of the AngloZionist Empire

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59 Comments

The Brit gweilo in Hong Kong said China will bring all other industrial countries to bankruptcy. Hahaha. This is impossible but if it happens then it is role reversal. and china certainly does not want this because China needs trade and trade can only be possible if all countries prosper and develop.

During colonial times, the western colonial powers brought their colonies to bankruptcy. Britain destroyed the Indian textile industry. The western powers led by the Brits forced opium onto China and China’s treasury was drained of silver and gold and China became the sickman of Asia. The same story can be repeated in SE Asia and Africa. All the colonies were exploited for their resources. There were no economic planning, like 5 years plan to develop their economies.

Agree with your coment. Problem is that the US-West still an probably will act as colonial power with the rest. They never learnt that is best for everybody to deal from a position of equality. Their only aim is maximal explotation. Thats a reason a big millitary catastrophy seems getting closer.

Manchester the city gave its name to the product it produced, cotton goods, but those goods were then transferred to India due simply to cheaper wages.

Tea, than great English tradition originally came from China and was quite expensive. The English (Jewish) merchants tried desperately to smuggle some ‘tea’ plants out of China, and one of the results of that was the camellia shrub, which was originally supposed to have been ‘tea’.

And of course those ‘English’ merchants finally succeeded and then started ‘Tea’ plantations in India and Ceylon for the British East India Company as well as other countries.

As Paul wrote to Timothy, “The love of gold is the root of all evil.” and China has seen this evil since before Marco Polo, and has learnt to deal with it, but do beware!

Manchester was an English manufacturing district with Mills or factories that produced cotton goods. I would imagine that the required cotton came from the American Southern states, you know, those states that England was going to support until the Russians stepped in in what was called the American Civil War.

You may even recall that Frederick Engels parents apparently had part ownership of one of those ‘mills’.

But the cotton went from the States to India (et al) to be processed into textiles and then bounced to England for final cutting, sewing and fitting. The balance of the ships involved in the trade came back with tea… tea clippers. That’s a couple hundred years old now… Let’s talk about China of today.

Chinese companies receive dollars as payment for its exports to the United States. The companies deposit the dollars into banks in exchange for yuan to pay their workers. Banks then send the dollars to China’s central bank, the People’s Bank of China. It stockpiles them in its foreign exchange reserves. That reduces the supply of dollars available for trade. It puts upward pressure on the dollar’s value, lowering the yuan’s value.

Ghassan, excellent continuation to your previous article. I would like to add, that Western money-men save not only on labour but also on other things like:
They do not have to provide any materiel. All they have to do is drop a documentation on the table. The said documentation gives China all the required information including complete design of the product.
The benefits for China or other slave countries are immense, as they do not have to spend any precious time and brain power to design the product. Of course they have to sign non-disclosure agreement, but I do not doubt that anyone can trample those if needed. We also know, why USofA is forcing all the “lesser” countries and this includes Russia by the way to sign all the “Protection Schemes”, which theoretically means that those countries can be dragged to some NY court for breaking those “Schemes”. This is how you exert your “Hegemon” power.
So, I am going to finish by saying this give work to China or other country in many area’s of industry, not only manufacturing of the required good, as there is a long process from raw material to finished product. Western money-men do not need to provide any of that, they place an order and receive finished good as required. So, to repeat, there are many savings and huge benefits. Example, you purchase an enclosure from an American Company for say $240. The enclosure hasn’t gotten any cheaper for you, the user, but the American Company’s profits skyrocket.

What is the point of this article? Economics was always about human behaviour it never pretended to be an exact science.

And why denigrate “monstrous seed of personal enterprise”??

This is typical of communists who think that food falls from the sky and straight into their plates. They think it’s ok to steal from, and expropriate, peasants who have done the back-breaking work in the fields. Once they have stolen the fruit of someone else’s “personal enterprise” they then denigrate it, and preach about sharing, brotherhood etc

China’s rise started with the agricultural reforms by Deng which allowed the peasants free will (i.e free enterprise) to plant whatever they wanted, and they were allowed to keep all food they had in excess of the quota they we’re had to share with the state. Result: it ended the famines under Mao, and created an excess of food that could feed the factory workers. The reason China is now able to challenge the blood thirsty Hegemon has nothing to with communism and everything to do with “personal enterprise”.

mod-to note: The point of this article is to describe the deceptive, misleading practices of modern “Western economics”, not economics as a principle. I believe the article does an excellent job of making it clear that “Western economics” pivot completely around large-corporate greed.

I strongly advice to anyone who wishes to learn about the roots of today’s Cina Economical successes… and also learn what kind of economical system and philosophy China of today is actually build upon as well as what it’s plan for the future is…
The New Silk Road – New Model for International Relations:https://www.youtube.com/watch?v=W-PqZRfOL7c&t=135s

This speech is given by Mis Helga Zeep Larouche, a person known in Cina as The New Silk Road Lady due to hers and her husbands direct involvement in the original Creation of the project known as New Silk Road, also known as The Belt & Road Initiative… This project represents today the essence, hart and soul of the Cinese Economy in all respects…

In fact, the whole idea of a New Silk Road worldwide project was first presented to The Chinese Gov in a Conference given by this Lady back in 1996 in Beijing where She than presented to the audience A certain Special Report Publication, in other words, she presented them with a detailed plan on how this future plan would supposed to look like if ever created in it’s exact image…

And as we know now, this is exactly what the president XI announced at a Conference in 2013…, saying that The N.S.R. project officially became the number one project of Peoples’ Republic of China and it has been so since then… This project accounts fore some 30% of the World economic events today in 2018 and it is only growing by any standards….

I apoogise. I guess I don’t understand what is meant by “Western Economics’. The West has a system that resembles National Socialism as in Nazi Germany and the Chinese have more of a free market system with capital controls.. Even though I disagree with the economics, I do respect Ghassan Kadi as a valuable contributor to this blog.

When you write, “Economics was always about human behaviour it never pretended to be an exact science.” you are perfectly correct. Economics is the study of human action.

By studying how and what people do when the interact in various ways it is possible to determine what the consequences are likely to be. So, take as an example, if a thief steals from you it is possible to understand that the consequences of that are a loss for you, as well as trouble for him (you and yours are going to seek justice from him one way or another). We can soon come to the realisation that the overall consequence of the thief’s action is negative for everyone in the community (the original loss you suffered, the consumption of resource towards capturing the thief, the consumption of resource punishing him, the consumption of resource trying to make you whole, the unrealised benefits to you and to everyone else had those resources been directed towards preferences now necessarily deferred or, worse, no longer available). It can be quickly understood and concluded that all theft is to be avoided. Theft, like coercion or fraud or acting to start imposing violence on others has major consequences, not all obvious and not all realised immediately. It means that when a political system has its basis of existence mired in theft then there can be no successful outcome*.

When you write, “The West has a system that resembles National Socialism as in Nazi Germany…” you are very close to the truth. That is something a lot of people do not like to consider. Same deal with China though. While it is freer in SOME aspects when compared to, say, the USA, it is highly restrictive and authoritarian in others. It is running the same type of tired false system that every socialist paradise tries to make survive. They all fail* miserably and hurt a lot of people right from inception.

BTW it is incorrect that China has no debt. I am surprised Ghassan Kadi writes such. What is going to be fascinating is when the Red Ponzi bubbles all collapse (which they will). How will the Chinese leadership react to that and what will they do? They can’t go back to Communism and since socialism is a root cause of their looming troubles, there is no solution to be had there. What China does have in each of its people is opportunity, intelligence and a particular ethical system. So what will be the choice? Which alternative is going to be grasped? No-one knows…. yet.

*I am, of course, assuming that economic success is when the people are not being impoverished in grand scale, or being mass arrested, or forced to do actions they’d prefer not to do or to avoid.

I took that to mean that “China has no NET external debt”, and that is very true: the country’s external debt of roughly $1.7 trillion is completely outweighed by its external assets of over $3 trillion

Thanks to rising U.S. interest rates, Chinese corporations are probably hurriedly ditching their dollar loans, so China’s foreign debt is even lower now.

(You may have heard that China was printing some yuan, and that was loudly trumpeted by sites like Zero Hedge as evidence that China was surrendering in the trade war. That wasn’t true, however. Chinese companies were dumping their dollar loans, because of the higher interest rates, in exchange for loans denominated in yuan, and therefore China needed more yuan. Yawn. What would the U.S. do without fake news?)

China’s debt is internal, in Yuan. It’s like left pocket owe to right pocket. China’s central bank can back-stop those debts and at the suitable time, even cancel them with no effect on the economy.

What is the visible outcome of China’s ‘debts’? You can see them in all the ultra-modern infrastructure traversing the whole of China. They help turbo-charge China’s growth now calculated at a ‘lower’ 6.8% per year.

But in terms of wealth created and placed in the hands of the people, its very likely more than 10% per year.

The finance for those infrastructure comes from the central bank, channeled through state-owned companies and shown as ‘debts’ in their accounts. In the west, under ‘normal’ economic principles, the infrastructures would have been financed by both tax-payer and also funds raised through bonds. The returns from the infrastructure would be in the form of tolls and calculated as a percentage of the return on equity invested.

In China, the return is seen partially in the economic growth rate but in reality in the real wealth growth generated by the explosion in business activities facilitated by the infrastructure. And the cost of the infrastructure is shown in the ‘debts’ owed to the government and carried in the books of the state owned enterprise which built and ‘finance’ the infrastructure. Am I confusing anyone?

So does China has ‘debts’? Yes, but those debts are owed to herself and can be cancelled by a decision of the government.

They did the same during an earlier period of restructuring of the state banks when they were ‘recapitalised’ by the central bank.

The US fed does something similar but with the whole world paying for its debts with real goods and services because they use the US dollar for buying and paying internationally and domestically.

But the US has nothing to show for its ‘debts’ because the US squandered them in many wars – 20 trillion USD and counting plus nearly a trillion USD per year on defence if you count all-in.

This alone explain the major difference between the US and China. And also the US have a buffoon for president. In China, you don’t get to be president unless you pass very high standards imposed by the CCP. A person like Xi would have been deliberately been passed through the mill and a strictly winnowing process under the watchful eyes of impartial experts, so to speak.

” I guess I don’t understand what is meant by “Western Economics’. The West has a system that resembles National Socialism as in Nazi Germany…”

And there you hit the nail on the head. :)

Shortly after 9-11-01, I got a book by Chalmers Johnson called “Blowback”. It turns out that Dr. Johnson was an ‘economist’ from a conservative American university. But he’d obviously gone rogue from that crowd. It had an amazing Preface where he compared modern economist (western) to the high priest in a temple. He described it all as idealogy and belief. High priests who simply told everyone what to belief, and beneath it all there was nothing but faith in an ideology. Free Trade is Good! Or, as Michael Douglass famously played it, Greed is Good! And any who question that is a Heretic.

“And China is not like any other nation. Its high population gives it a demographic clout that no other nation possesses, and there are no “laws” and “rules” of economics that warn about this, are there?”

Yes there are. But you’ll have to actually study, read up on economics before you’ll get it. Relationships about demographics, population, density, etc were noted in the mid-1800’s in the US, and earlier in England.

The article has lots of other problems as well, China was industrializing before it allowed foreign investment, and the foreign production zones. China has been doing many other things besides allow foreign development, to get its production capabilities up, to strengthen its economy. The article needs to have more of those things in it.

“Where in the “rules” of economics do we find any rhetoric that alludes to such contingencies that are not merely profit-driven and based?”

There is a problem here, as for example there is plenty of discussion in the economics of health care, about how to maximize health outcomes. Not profit. There is also discussion about profit, but it is not the only consideration! Also, for example transportation safety. The manufacture and maintenance of aircraft, automobiles, etc have considerable regulation, and TSB, etc, that are directly involved in supporting safety, and they don’t consider profit at all. The consideration of these things is in economics. Profit is not the only consideration in mainstream economics. The author simply does not have the depth. There are other fields, such as infrastructure economics, were profit has no consideration. And more…

@Anon at 12.46 pm. Agreed, profit should not be the only consideration in economics (although I most often read about “The Bottom Line”). After all, Economics is simply the Greek word for the rules of house keeping (Oiko Nomos). In this broader aspect, Communism and Capitalism and Culture are all part of Economics. From this point of view, 3 things I missed in Kadi’s article are:

1. Communism, the supreme legacy of Mao. Fighting off the rapacious Anglo-Capitalist protection racket as well as the equally rapacious Japanese exploitation racket. Instilling a sense of common good and common purpose, as in the One Child policy which gave the nation a respite from the Malthusian curse which afflicts Africa.

2. Capitalism, in the traditional business sense shown by Chinese (and Jewish) diaspora.

3. Culture, traditional Confucian Culture which is remarkably similar to Jewish culture (Respect for elders, respect for ancestors, respect for learning, respect for authority and examination grades).

For real depth here I suggest the study of Karl Marx’s great teacher; Hegel. He defined the issue as “collective self -estrangement.” That means a culture trapped in the illusions and distortions of egoism. I think the author of this worthwhile post is actually correctly criticizing the interpretation of economics from the perspective of alienated egoism or self-estrangement. This is the standpoint of the capitalist bourgeoisie. Rapacious egoism. In Hegel self-estrangement means the absence of authentic spiritual self awareness. So we have “economics” operating as the denial of spirituality. This was Marx’s starting point. The point is to overcome collective self estrangement. We can all learn a great deal from Marx’s early philosophical definition of communism; “the collective transcendence of human self estrangement.” He worked all his life to promote a vision of political economy guided not by alienated rapacious egoism but the authentic expression of the human spirit. This is why he is so hated by egoists. The Chinese are much clearer about all this than us Westerners.

To Dr. NG Maroudas and Snow Leopard: There is a point that could be addressed, and should be more often, that of ‘rent extraction’. This is at the heart of differences in political economy, between socialism, and rentier capitalism, (there are other forms of capitalism). Western economies now are operating to support rentier capitalism, while economies such as China, Iran, and others are actively fighting against rentier extraction. Rentier capitalism cripples economies, and has the most abusive, exploitive, excesses. Ultimately, rentier capitalism causes a high cost economy that is uncompetitive. Suppressing rentierism makes for a low cost, competitive ecomony. In addition, the strong use of public infrastructure supports a low cost, competitive economy, without rentier charges. China and other economies using such considerations will displace other economies, if they are wise enough to not allow rentierism into their economies. Of course the imperialists want to force their way into such economies, and force rentierism into those economies, to rip them off. And this is part of what the ‘trade war’ is now about.

@Anonymous
Disagree. Everything is a profit model invented in Finance Think Tanks. If something is not considering profit it is because there is profit in not considering it.
You have to keep your slaves in the cotton fields safe, strong and healthy, if not they provide less profit in relation to their investment.

A variation is the destructive socialist model which parasite on production by illuding safety, healthcare, women´s lib, clima, third world, environment, etc.
A pure bureaucratic hot air construction contributing only to the illusionary matrix slave world.

The only real and true economy, is the one where a family are complete independent of banks, government, lawyers and other parasites, i.e. “have your own business”, the American dream.

In addition to other things mentioned, the government demands that certain sectors operate, even though they operate at a loss. The government keeps them going. The security state demands that some things operate, regardless of losses.

China. Many analysts assert that China is one of the main examples of state capitalism in the 21st century. … This is a form of capitalism but one in which the state acts as the dominant economic player and uses markets primarily for political gain.

A capitalist free market system is based solely on demand and supply, and there is little or no government regulation. In a free market system, a buyer and a seller transact freely and only when they voluntarily agree on the price of a good or a service. A transaction will occur when the buyer and the seller agree on a price. Because a free market system is based solely on supply and demand, it leads to free competition in the economy, without any intervention from outside forces.

On the other hand, a private owner in a capitalist system can have a monopoly on the market and prevent free competition. Corporates dictate the price of final product and the workers salary as well.
So the goods, capitals and people are under total corporate-banking control.
This is hegemonism. Health care works for a profit, Insurances works for a profit, loans works for a profit, on expense of the people. Hegemonism means Financial Dictatorship.

You are right that many of the ‘foundations’ of the ‘free-market’ version of economics that has come to define western economic thought since the foundation so the Chicago School of Economics, are profoundly in error.

Let us examine some of these foundations:

1. That the ‘free-market’ economic system is a natural system.

Nothing could be farther from the truth. An ‘Economic’ system is a sub-system of a ‘Political-Economic’ system. ‘Political-Economic’ man-made systems that are the basic infrastructure of rules and regulations that governs the functioning of a society.

2. That ‘free-market’ system is inherently stable.

Again completely wrong. ‘Political-Economic’ systems are auto-creative complex abstract systems. This type of system is inherently unstable. However they exist in a state of meta-stability constrained by complex sets of rules and regulations (i.e. constrained instability).

3. That ‘free-market’ systems function best when regulation is minimized.

Again completely wrong. Economic systems are, by definition, sets of rules and regulations. The only question is who makes the rules, economic actors or political actors.

When political actors, who legitimately act for the benefit of the society as a whole, make the rules then the system can be coherent and can evolve are required to meet changing circumstances (i.e. become auto-creative).

When economic actors make the rules, the always act in their own interest. In fact they are required by the rules to act in their own interests. This inevitably leads in two directions simultaneously. Firstly the system becomes incoherent, as many different actors creating rules that benefit themselves create rules that are both conflicting with the rules of other actors, and sub-optimized for the system as a whole, leading to anarchy. Secondly, as successful economic actors accumulate power, they increasingly use this power to favor themselves, with the ultimate result of arriving in a position of monopoly. Under monopoly the system can no longer evolve, as any change will weaken the position of the monopolist which he will reject. Thus, with economic actors making the rules, the system becomes one of serial monopolies in a sea of anarchy.

The ‘national disasters at home’ that you describe are the result of the above errors:
– destroying their own political systems, that provide for legitimate political actors to regulate the economic system. The concept of open borders is a perfect example of efforts to destroy these political systems.
– deregulating the economic system, which removes restraints and allows the system to become anarchic and unable to evolve..
– allowing economic actors to make the rules, which leads to monopoly (Amazon, Walmart, Google, Facebook, Too big to fail banks, etc) and an inability of the system to evolve..

China and Russia on the other hand are implementing policies that provide for:
– Political systems that act legitimately for the benefit of their societies.
– Economic systems, whose rules are made by political, not economic, actors for the benefit of the society as a whole.
– Economic systems that are coherent and have the ability to evolve as the environment evolves.

Is it any wonder that the west is collapsing and Russia and China are rapidly advancing?

The failure of western economics is the result of a decades long effort by a limited number of (extremely wealthy) elites to convert the science economics into a propaganda service. This propaganda service is used to justify the imposition an effective dictatorship, of these elites, over western societies, (and, through their project of global governance, to the world as a whole).

“When economic actors make the rules, the always act in their own interest. In fact they are required by the rules to act in their own interests.”

Just what is ‘in one’s own interest’??? The Chicago school wants it to mean one narrow set of things, while the Chinese are doing something else that the Chicago school does not want.

Show what the rules are that absolutely require anyone to ‘act in their own interest’? Where is it written? When there are more than one choice as to what is in one’s own interest, there would seem to be an internal contradiction that over turns the statement.

Not everyone is an ‘homo economicus’, and not everyone has to behave according to the Chicago school.

There is a legal ruling on this, about the Ford corporation. But it does not say what those interests of share holders are that have to be followed. In fact, as can be seen in the book by Norbert Haring and Niall Douglas, the CEOs and boards of corporations have proven ability to run corporations contrary to the interests of the shareholders, as determined by voting, indefinitely. That is, CEOs and corporate boards rule the corporations not shareholders, regardless of supposed rules. Fiduciary responsibility does not mean anything, to CEOs. Quarterly reporting does not force CEOs to do anything. There is no rule that corporations have to maximize profit, corporations would kill any such rule if it ever arose, as CEOs don’t want such a rule.

Shareholders do not rule corporations, CEOs act according to their own interests. Read the book by Haring and Douglas.

This is how it works: at corporate meetings, the agendas, and what topics are taken to voting, are dictated by the CEOs and board. These are written in advance. The shareholders do not determine the agendas at meetings, and there is no voting by shareholders as to what is taken up at the meetings. This is how CEOs have a lock on the situation.

The ‘rule’ means nothing, as there is no vote that ever comes up, that the CEOs don’t control the topics voted on. The CEOs do not have to take up any subject they don’t want, at meetings.

Read the book by Bill Black about how CEOs loot corporations, contrary to the interests of shareholders. This will open your eyes to some of what is really going on.

Oh, no, not at all! Some actors are according to the homo economicus picture, as you indicate. Others are not so. Did you not read the point about China not following the Chicago school? CEOs are not the only economic actors. In fact they are a tiny minority!

Also, other massive deviations to that idea are to be found in the Haring and Douglas book. It’s worth a read, and they are not the only source for discussion on that. Homo economicus is not in the majority. Why is it that people donate money to various causes that in no way benefit themselves? Those people are economic actors that do not behave according to the homo economicus model. Disproving your contention.

The policy makers of China, Iran, and some other places are economic agents, controlling actors, that do not follow the Chicago school.

Admittedly, they both begin with a C, so I suppose its an easy mistake. Capitalism is the philosophy that its ok to steal, pillage, employ slave labor, deny health care, force workers to slave away in unsafe conditions which kill and maim many, etc, etc, etc.

Charity is what Jesus tried to teach us. Helping people in need. Loving thy neighbor.

Thus, while they both begin with a C, they are completely different concepts. Using Charity as an example in an argument about Capitalism doesn’t work. Don’t be confused when the Capitalist Pyschopaths follow their PR and Tax advisers advice to give to a charity to try to prove that they aren’t really the evil, inhumane capitalist psychopath that they really are. That’s just a charade.

If you were trying to say that not everyone is an evil, inhumane monster following the precepts of Capitalism, that’s just because Capitalism hasn’t completely succeeded in killing and destroying all Charity and Caring in the world yet, but they are trying. Don’t ever doubt that they are trying.

Whoa up there, Anonymous on September 15, 2018 · at 10:35 pm EST/EDT , the point is about economic agents, not about the differences between capitalism, as you define it (there are others, there is more than one type of capitalism) and charity (or different types of charity). There is no form of capitalism in which all people act as the homo economicus. Not one. If you know one, tell us.

All economic agents are not the same. All economic agents do not fit into the homo economicus model. Also, a related concept, ‘rational agents’ has also been debunked.

At some point, the “Board” is elected by Shareholders. This of course would be the most important vote at an annual Shareholders meeting.

Of course, the current board and officers try not to give them a choice, the typical ‘ballot’ says to re-elect the existing board. And they also try to get Shareholders to sign “proxies” that give their vote to the current board or officers. But, if Shareholders are upset at problems in the company, they can not sign those proxies and propose new candidates for the Board. Of course, if you buy 5 shares of Apple, expect to have a very, very, very, small voice at such a meeting. But if you are CALPERS (California State employee pensions), they own big enough blocs of stock in some companies to have a say in who’s on the Board. Same with some of the big hedge funds and banks of course who can own significant percentages of companies.

Of course, the CEO is hired by the Board and thus can be fired by the Board.

I’m not sure about recently, but the Corporate Raiders of the Reagan era would at times file Shareholder lawsuits against the existing Board claiming that was not maximizing profits.

This has been studied. CEOs and the boards they control, are almost impossible to unseat. It’s in Haring and Douglas’ book. Shareholder activism only works, to a limited extent, for the biggest oligarchs.

This video deals with the underlining philosophies which create a base on which the whole economic system of one kind is based upon… On the one hand it completely undresses the above mentioned Chicago school of economics and all of it’s ilk, and in the other hand it shows the difference of a Good type of an economical system such as the one in use by the Chinese and the Russians today and the whole diametrical opposed philosophy that such type of a systems are based on…., being the win-win systems that they are….

The specific policies of geopolitics are an expression of deeper, underlying axiomatic philosophical views. The entire school of British philosophical radicalism or radical empiricism was created to try to destroy the ideas of Gottfried Leibniz and the American Revolution, and enthrone geopolitics forever. The class will address the empiricism and hedonism of David Hume and Jeremy Bentham, in particular, to get at the fundamental view of human beings, knowledge, society, and the physical universe that is the deepest basis of geopolitics. An antidote to this poison will also be provided.

This article is interesting. However, it raises more questions than it provides answers.

During Maoist rule in China, you had Government ownership of manufacturing. Nixon pays a visit to China, and China opens up to the West. It’s industry improves. Private enterprise is again introduced, while State owned institutions are kept by the State. As far as I can see, we now have a partnership in China, where state owned and privately owned institutions are working together, which no doubt brings stability to the country.

We have an exact situation in Russia. After the fall of communism, Yeltsin foolishly introduces liberal capitalism in Russia, leading to the closure of 70.000 factories. Putin replaces Yeltsin and starts reopening the closed manufacturing plants. In Russia we also have a partnership between State owned and privately owned enterprises. Russia’s chief advantage are its natural resources, such as oil and gas, which have been kept under Government control, and wisely so.

We also have the example of Austria, a small, beautiful country. When it comes to business, small and medium sized private enterprises are permitted. Perhaps this is the answer to Austria’s overall stability, as compared to corporate feudalism which you have in the US, and one which is guiding the country’s domestic and foreign policies, based on good old fashioned greed.

In the US 70.000 factories have also been closed. I always found this to be a very strange coincidence, that 70.000 manufacturing plants are closed both in Russia and in the US. Did this happen by accident, or by intent ? Well, 70.000 factories were closed down in Russia, certainly with the intent to weaken it. And in the US ? Why the same thing ?

The article states that investors from the West (US) started investing in China without realizing the consequences in the West (ie. closing down manufacturing plants in the US, thinking there would not be any repercussions). This is impossible to believe. What country voluntarily closes down 70.000 manufacturing plants, hoping to prosper ? You don’t have to be an economist to guess what would happen. We now have 1/3 of the US labor force “out of work” and in the process forgetting their skills. By the way, how many manufacturing plants has Trump reopened ? He has been in Office almost two years.

The overall impression is that Nixon in 1972 went to China, hoping to create a permanent rift between communist China and communist Soviet Union (Russia). The bait was Western technology and trade, which China accepted. However, China did not go against Russia, as anticipated, doing wonderful business with Moscow, especially when it comes to energy. We now have a Russian-Chinese economic partnership. Did the West anticipate this, or did this come as a shock ? Trump is now quarreling with both Moscow and Beijing, extending his quarrel to the EU as well, and EU countries are beginning to look towards the East.

One can conclude that in trying to prevent the rise of Eurasia and creating a rift between Russia and China, all the West has done is to ensure that Eurasia did indeed begin to rise, and that this process cannot be prevented.

“The article states that investors from the West (US) started investing in China without realizing the consequences in the West (ie. closing down manufacturing plants in the US, thinking there would not be any repercussions). This is impossible to believe. ”

It was well known, from the beginning. As Steve Jobs said, ‘those jobs are not coming back’. It was an objective, to get rid of many manufacturing jobs.

Well, there are a lot of US policies that make no sense to me, but they never ask me! Perhaps the policy makers are aiming for a complete military centered economy, with military manufacturing, but no civilian manufacturing? With conquest regions paying the bills? Who knows? They won’t tell what they are up to.

The US elites hate “socialism”, except for themselves. Imo they moved the US manufacturing base to China simply to remove any threat to their political power from a real, organized Left – meaning a well educated, healthy middle and working class. After the US elites moved the manufacturing to China the wealth of the elites has increased many fold, this move has been extremely profitable to the point any real wealth goes directly into the pockets of the elites in the US now. So there is your answer, total political control (fascism) together with extreme riches to be made. It’s a kind of cannibalism. Obviously it was calculated and deliberate. Why share the wealth with the working stiff schmucks?

@B.F.
I can answer that. As they say, nothing happens in politics without being detailed and carefully planned.
The illusion that the Elite dont know what they are doing and need the sheeple´s good advises, are …….precisely an illusion.

First we need to know International Finance rule everything in our world from behind, most in the Western part and to some extent in other part. If people dont understand this, they go wrong about everything.

Second it has rumoured that the Financial Elite planned the shift from overused and overexploited USA to the virgen 1 500 000 000 people new extended profit market.
Goldmann Sachs made the BRICS idea for China, China is sitting in the Board of BIS.
Saying the idea of the Financial elite is to suck up America and then shift center 180 degree to China and start sucking all over again.

Then you understand that closing 70 000 factories was done by purpose, as a move on the Financial Elite´s Chessboard.

The West has a totally encompassing worldview and integrated systems of knowledge, all based on certain principle factors, such as: hatred of Truth; rage at man’s ultimate powerlessness; cynical abuse and destruction of Life. Certain methods of rearing, and bringing into line an “intellectual elite” are: a superior conceited pride through illusion of knowledge and power; promise of riches and the flattery of high position; unrestrained and justified hatred of all inferior and lesser peons. These Helots lord over us and thus are gods to themselves. To credibly attack the Western worldview it is not really possible, because it is a fully-enclosed and self-perpetuating/fulfilling system, ungrounded from any cogent truth, so there exists no place from which to attack it from within. Minotaur maze. In principle, because the West has no truth, no argument or rationality can stand. Any argument is both true and false, only those who are empowered to judge correctness are esteemed to be valid, and only for as long as it is convenient to others. The shining intellects of the West are actually all very dim, and the brighter they shine the sooner they fall from sight. Just my too bits…

“India’s educated English-speaking youth were keen on developing IT skills and became world leaders; both in quality and quantity. ”

Nonsens of course, i mean the following : ” [India] became world leaders; both in quality and quantity” , see the list of ACM International Collegiate Programming Contest winners – there are no Indians as winners at all but students from China have won the contest 4 times since 2000, compared to Russia’s 11 times as winners, see Russian wiki on the subject because it shows more clearly who was the winner than the English wiki on the subject,

which is understandable because its about 20 years or more as no gold winners from English speaking countries have been listed. BTW there is no article about the competition in the Hindi language .

PS.
Its interesting to note that small Europen countries such as Croatia, Czech republic, Byelorussia, Lithuania etc. or medium sized ones as Poland (most of these countries are Slavic or Balto-slavic ) are able to compete successfully with the Asian gigants or enormous English speaking world and especially with the world self appointed “natural prodigies” – the Jews, who have never won the competition till now.

I take it this contest was invented after the time of Albert Einstein?

Sorry, but my feeling on racial stereotypes is that if you try to say anything about any group of three or more people more general than “They Breathe Oxygen”, then you quickly start to see and notice all sorts of exceptions to the supposed stereotype that of course, everybody knows. Start telling everyone that all of ‘those people’ are theives and can’t be trusted, and of course someone with an open mind and open heart will meet someone from that group who is honest and true and loyal.

That’s usually when someone spits out that nonsense phrase about “the exception that proves the rule”. Huh? What the heck does that mean? Except its usually a cover-up for when someone believing in stereotypes is confronted with the evidence that no, not everyone in that group fits a simple description. When you hear that phrase, what it means is that a person who was employing shallow thinking is now in quick retreat and trying to throw up a smokescreen.

All people are individuals.

Please shut this conversation down – it is going off-topic. Any further will go to trash. Mod

Mao developed China faster and further than Germany during her takeoff, or the US, Japan or Korea during theirs.

China could have continued growing at Mao’s average 7.25% but chose to bump it to 10% using capitalism. The borrowing–like all responsible borrowing–anticipated repaying the debt from the additional growth, which it is doing.

Debt was never an issue until The GFC threatened China’s agenda for 2021 (By July 1, 2021, every Chinese will have a home, a job, plenty of food, education, safe streets, health and old age care. On that day there will be more poor, hungry and imprisoned people in America than in China. Not relatively or per capita, but in absolute numbers. 450,000,000 urban Chinese will be worth more and have higher disposable incomes than the average American, their mothers and infants will be less likely to die in childbirth, their children will graduate from high school three years ahead of ours–and outlive ours) so China piled on high quality debt to bring forward some planned investments–most of which are paying off in spades.

90% of China’s debt is domestic and, of that, 60% is between government departments; the debt-to-asset coverage is 1:4 and consumer debt is negligible. Wages are doubling every decade like clockwork and 2021 is back on schedule.

“…every citizen will have a home, a job, plenty of food, education, safe streets, health and old age care.”

That one sentence describes why Wall Street wants to nuke them!

Wall Street bankers have nightmares about such a world. They wake up in cold sweats in the middle of the night and call the General that they met at a seminar in Aspen and seek reassurance that they really can nuke everyone and prevent such a horror from ever coming to pass. And they certainly have no problem ordering the deaths of millions of us to prevent such a thing from ever happening.

Capitalism is a philosophy for justifying great evil. There was once a time when those that ruled felt they had some responsibility for the people they ruled. But now, backed with the philosophy of Capitalism (aka Western Economics), they now have the firm belief that they have no responsibility to anyone. They’d say “Let them eat cake.”, but now they just want all the cake for themselves.

“The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors,” and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment.” It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom—Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage-labourers.

The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.” — The Communist Manifesto.
—————-
Now tell me that those words that are well over a hundred years old don’t still describe so perfectly the world of the 21st Century Capitalist!

This is a very good article in as far as it goes, but the truth and the history is a far longer and greater road.

The major question that should really be asked is: “Just how do those who believe they should be the ‘Master’ rule the world? Of course we have just one example at the end of the French Revolution when ‘they’ declared war on all Monarchies. Stop and think about that for a moment, and then look back on recent history.

For Australia, Whitlam became the Prime Minister in 1972 just in time for Nixon’s move from gold to oil, and suddenly the price of petrol exploded and caused major inflation in Australia and I would imagine throughout the world. This caused Australia to find its own oilfields and by the late 1980’s Australia was producing 97% of its required oil, but then the focus changed from oil to gas. Again because of an agreement made, I believe with the Menzies government, the ‘Oil Companies’ demanded and got a ‘World parity’ price scheme in regard to the oil.

We were also told that Whitlam was the first Prime Minister to recognise China; that may be incorrect as John Gorton made a similar claim, so we are aware that Australia beat Nixon in recognising China, but I have deviated from the main points.

Prior to 1972, Australia had a high employment record. that is ‘full time’ not part time casual as we have today. In fact Menzies almost lost the 1964 election due to the fact that ‘Full time’ employment had dropped to 94%. We had our own industries, imports were tied to exports until about 1965, and the ‘Australian Dream’ like the American dream was full on, and wouldn’t become a nightmare until around the late 1980’s. Whitlam also created a new ‘Dole Scheme’ where if a person couldn’t find the job they wanted, they could apply for the ‘Dole’. Suddenly there were a lot of people who wanted to be ‘Lion Trainers’.

Whitlam was ousted in 1975 and Rupert Murdoch told the ALP that the Labour Party would never again hold office until they made the drunkard leader of the ACTU, Bob Hawke their next Prime Minister. By 1980 the ALP did what Murdoch told them and prepared the seat of Coburg for the required candidate, Bob Hawke.

So just exactly what did the Hawke/Keating government do once they gained power in 1983? Well, Bob Hawke’s most remembered statement was; “By 1995 there will be no child living in poverty in Australia!” Well that certainly didn’t happen, so what others were there?

How about; ” Australian workers are too expensive, so we’ll have to send their jobs overseas to China”. That virtually destroyed much of Australia’s manufacturing. Later policies in regard to the manufacture of motor cars went by 2016.

Then we had Paul Keating destroy the ALP’s most famous win, the “MacKay Harvester” decision of 1916 which created the “Basic Wage” which stipulated that any male over the age of 21 years had to receive a wage on which he could raise a wife and two children. Keating removed ‘The Basic Wage’ and brought in the ‘American idea of ‘The minimum wage’ so as to create the part time casual worker which now dominates the work force. This also allowed such companies as ‘Coles’ and ‘Woolworths/Safeway’ to open 24 hours with of course minimum costs, including the removal of overtime benefits, holiday pay and sick leave.

Paul Keating also created the ‘partial privatisation’ of Australia’s ‘Commonwealth Bank’. To do this, smaller banks like Victoria’s State Savings Bank had to be destroyed, and the Cain State Government certainly achieved that illegally. Now, the banks instead of paying out minor interest on savings started charging people for using ‘their own’ money and of course ‘bookkeeping fees.

Now in conjunction with the privatisation of the banks, Paul Keating made another two major moves; firstly he ‘floated’ the Australian Dollar which was originally pegged at $1:04 US. This allowed the American institutions to attack the Australian dollar and once they moved it to under 50Cents (US) the carpet baggers moved in and bought everything of value.

The next major move was to announce that Australians were not saving enough money, and so he then created the ‘recession we had to have’. Mortgages went from approximately 8% to 20-25%, causing many mothers who were at home looking after their children to attempt to rejoin the work force, and again this should be considered with the destruction of ‘The Basic Wage’ and the creation of ‘The Minimum Wage’

Then finally, to ‘help all Australians to save money’ the first wage increase (December 1991) in this recession we had to have to stop Australia from becoming a ‘Banana Republic’ Keating gave the workers a 5% pay increase, but the money didn’t go to the workers but rather their ‘Superannuation fund’ even though the Australian Federal government had been taxing the Australian worker 7% for a ‘Federal Aged Pension Scheme’ since 1947. Of course, now that the Australian worker has a ‘Superannuation Fund’, the Federal government no longer has to honour its ‘Old Age Pension’, or at least that is what it claims.

Now of course what happened in Australia wasn’t confined to simply Australia, but throughout the Western world, and the lessons here are quite simple; The very same people who set up China as the production centre of the world also deliberately attacked the Western countries and looted them to ensure that ‘their schemes’ worked.

This was a types of warfare, and do you think that the Chinese or the Russians are not aware of this? Please! If I know it so do the Russians, the Chinese and most other governments, and this is the use of ‘Economics’ as a weapon of war.

Now for all of you who follow Marxism, may I ask you this? After the release of the ‘Communist Manifesto’ in Europe in 1848, and the European governments put down those revolutions, most of those ‘players’ bolted off to America, but the main two, Marx and Engels fled to England, where the German Engels’ family apparently had some ownership in a Manchester Mill (factory). Have you ever really thought about why Marx and Engels fled to England for sanctuary? Could it have been that their ‘Boss’ resided in London at that time?

I quote from an article describing the Brit destruction of the Indian textile industry.

Quote: “India emerged on the British horizon as a treasure of cotton to be plundered with its fertile lands and cheap labour. They, however, were aware from experience that the Indian textile industry and market was not easy to conquer. Since it was not only the British merchants but also the British state authorities who were interested in procuring Indian cotton, a systematic plan was implemented to obliterate the successful and prolific Indian textile industry and economy.”

“So when China decided to capitalize on the knowledge and experience it learned from Western investors, it did not only have the human resources, but also the preparedness and determination to develop its own technology and industries at all levels; ”

Im rather pessimistic about the future of Asian countries and their
technological progress. Nowadays technology and machinery are inseparably connected with science and it is this combination that makes a nation developed one. China (and other countries of Eastern Asia) so much praised in the article by the author, simply has no tradition in the Europen style science. Science is strongly connected with the national culture and the type of civilisaton that produce that science. So it (the science) isnt something that can be so easily imitated or borrowed from Europe or Russia/the USA and planted into the chinese soil. Its evident that some technological advance in the countries of the region is something that progress with great difficulty: the Japanese space technology ( unmanned ) of 21 century resembles that developed in the USSR in the 1950s. Chinese system of phylosopphy is different, the nations of the region have exotic languages with some specific qualities that make it difficult to use them in modern (Europen style) science. (Indoeuropen Asiatc nations have in this linguistic context some advantage over the far Est Asians). They say science in China is mainly applied sciense, not fundamental one. The Asians symply copy and produce things developed in Europe or Russia/the USA: cars&trucks, space ships, some types of licensed aircrafrts ,tanks, celular phones and assempble computers etc etc etc.

The chinese advantages mentioned and much praised by the author are very doubtful ones: cheap labour, military might, improvbing quality and demographic might. Cheap labour force in the near future will be replaced by robots, especialy the labour force of the chinese kind and the demographical might isnt here in this context an advantage at all. The military might is based mainly on licence production (mainly from Russia) and/or things stlolen from Russia or the West. And finally the improving quality is something that i havent been able to notice unfortunately. Especially dangerous are robots that will be able to destroy societys and probably even whole countries and nations both in the West and East, but in my opinion East and the Asians will be more vulnerable.

One of the issues is that there are several schools of economics. Different ideologies. A good article could be written describing the different schools, different policies, track records, how well their different theories work, and well they predict things.

In fact, there are only two systems of economy in the existence in the world today… One is the American System of political economy, represented especially by Alexander Hamilton and Abraham Lincoln, as opposed to the British System, characterized by the works of John Stuart Mill, Charles Darwin, Thomas Huxley, Adam Smith, and Karl Marx.

What China is doing today economically wise is what is known as the American System of Political Economy

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